The present drought situation across length and breadth of India is likely to adversely affect a number of sectors but most importantly the auto sector and along with it, demand for tyres. Tyre manufacturers are apprehensive of demand during the coming months following slowdown which has already commenced since the past few month wherein auto companies have scaled down production and are complaining of rising inventories.
Demand for cars is at an all time low and demand for trucks and buses do not seem to be any better either. Downhill demand during the year was further impacted in the month of July which has left auto manufacturers and tyre companies pessimistic of their future following poor rains in the country. Current problems faced by Maruti Suzuki at their Manesar plant is also adding to problems which do not seem to be coming to any logical conclusion any time soon. To add to this is the prospect of deficient rains which would affect tyre consumption to a large extent.
Prices of rubber too have dropped both in national and international markets while inventory is piling up.
However with host of new vehicles being launched in the country preceding the upcoming festive season, Rajiv Budhraja, Director General of Automotive Tyre Manufacturers Association is optimistic that the coming months will see more positive sales.
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